With few exceptions almost every virtual currency asset available is either stagnant or worth less than it was a few days ago as the prices have taken a large dip across the board.
ZCash and Stellar have managed to remain virtual unaffected, and n fact even saw their prices slightly increase over the weekend.
Litecoin, on the other hand, spiked in price hitting as high as $135 per coin.
Ether, BCash, and Dash have taken hard hits all three once over the $1000 mark Ether and BCash as recent as within the last 48 hours. Dash has been below $1000 for quite some time now.
Bitcoin drop from $9200-ish to a dismal $7200 and in the last 24 hours and seen a high reaching $8714.86 and dropped to as low as $7349.83, which isn't too far from it's current price around $7358.
What Going On?
Of course you're going to hear allot of stories ranging from bank credit card bans to Coincheck (which didn't even involve bitcoin mind you) as to the reason for bitcoin's decline in price this month and whereas there may have been some people who allowed news like this to affect their judgement and took a loss by selling, for the most part, it has nothing to do with any of that.
Quite simply put, this is normal. This always happens around this time of year just like the value pretty much always spikes in December or January followed by a big drop starting as early a December through about March.
This is loosely based on what's called the "January Effect" but it's not as prominent as it once was with the internet allowing things to occur much faster, additionally when you throw virtual currency in the mix you have just about right up until March in some cases if a fiscal year lands right before April.
What happens in April? Taxes.
Back in the day the January effect was pretty much more like clock work where Investments were made in January and sold in December to harvest either profit or loss. In many cases it's beneficial to hold the asset past January 1st to keep any capital gains from showing up on that calendar year. 4
In other cases where fiscal years (used by corporations) conclude in March, the same process if shifted a bit.
However for the most part the drop usually begins in December to right at the beginning of January and then declines through March and this year was no different. Bitcoin reached it's all time high over $19,000 on December 17th and has been dropping ever since.
Those who were holding over to keep from earning capitol gains are past the mark and if there's profit to start the year off with, then naturally now if the time to take it.
What To Do?
You'll also hear allot of crap from the mainstream media saying that investors and bitcoin traders will all tell you to HODL (hold), but in reality that's not exactly true.
Sure that's what they are going to say on some message boards and friends, but underneath the sheets they want you to sell. They want that price to dip. They want to buy it now and they want you to go ahead and take that loss rather than hold on to it because it serves them well.
Then later down the road this year around September through December/January they can turn around and sell the bitcoin you took a loss on for a nice profit when the price goes back up.
This happens time and time again following the same overall pattern and this is not just limited to bitcoin or virtual currency. Take a look at the DOW which saw it's biggest drop in a year. It's the same principle.
If you're smart, you'll hold. If you want to get out, give us a call, we'd be happy to buy your bitcoin now while the price is low.
Last but not least we also have to mention the "$19,000" high in December. Yes, that's what bitcoin hit and then quickly diminished. That's called a spike. There were some significant dips and spikes but overall few people expected bitcoin to hit anywhere near $20,000 in 2017. I believe we had predicted around $2,500 or $3,500 on the year.
[info title="Editors Note" ]Dinbits official prediction was that bitcoin would hit $2,500 by September and $3,500 before the end of the year. This was on May, 24th, 2017 in this article.[/info]
You have to take the mainstream media with a grain of salt when they say things like "bitcoin loses half it's value in a week" because It also gained half that value in a matter of days so long investors didn't see any losses only those trading during that short time span.
Ultimately an investment in bitcoin in January of 2017 is still with 8 times its value a year later.
People take profit, isn't that why most people invest money to begin with? This industry is no different so don't believe the media hype and panic sell because you'll only be doing exactly what the professional investors want you to do, take a loss so they can take your win.
The only way to win, is not to lose.
[accordion] [item title="Author and Credits"] Article by dinbits
Image Credits: Banner Image by dinbits.com staff
Image Credits: Banner Image by dinbits.com staff